Past Accomplishments and Future Regulatory Challenges

Publication Date: March 30, 2002

Author(s):

William Apgar

Mark Duda

The U.S. Congress passed the Community Reinvestment Act (CRA) in 1977 to encourage depository institutions to meet the credit needs of lower income neighborhoods. The CRA was built on the simple proposition that deposit-taking banking organizations have a special obligation to serve the credit needs of the communities in which they maintain branches. At the time of the CRA’s passage, banks and thrifts originated the vast majority of home purchase loans. The CRA’s initial focus on areas where CRA-regulated institutions maintained branches made sense because restrictions on interstate banking and branching activities were limiting the geographic scope of mortgage-lending operations…

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